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Money matters: Do pigs have wings?
Part 2
Graham Macdonald
MBMG International Ltd.
Our main takes are still the
same (continued):
4) A while ago we viewed tangible assets such as gold and
other hard commodities as being undervalued, looking for gold to double in price
over 3-5 years. Since then we’ve seen a gain of 11% to the end of the year,
although this year has started with a fall back on profit-taking. We remain
happy to buy and hold and look for longer term targets.
What if we’re wrong? How far can gold fall in the
current market? A real gold bear market would see a max fall in the region of
30% over a drawn out period of time. Compare to equities – they could fall at
least 40% (some analysts say 70%) and don’t appear to offer 100% + upside over
3-5 years. In other words, gold offers a much better upside in return for much
less downside. To us, that’s the epitome of a relatively efficient investment
strategy.
5) In November we stated that the US dollar (USD) was in a
bear market due to the need to devalue, the need to print dollars, the
unattractive interest rates, the rate differentials going forwards, the
reduction in capital inflows from Asia, the American monetary policy, the
American fiscal policy etc., etc., etc., etc., etc. The dollar promptly fell by
almost 10% against our preferred currencies. The thin trading conditions of the
holiday season were, however, prime breeding ground for a dollar rally. This,
though, may well be over within a very short period of time and the downtrend
set to continue. The Australian dollar (AUD) and sterling both looked attractive
at that stage because of high interest rates but the crumbling property markets
in both countries suggests that both currencies may have achieved a short term
peak. The Euro, which is not without problems, and, to a far greater extent, the
Swiss franc (CHF) look like the best bets. The euro is fairly valued but has
some political risk due to the various referenda, new additions to the euro and
if there is a major downturn has no status as a safe haven currency. Eurozone
economic conditions are also a cause for concern – the strength of the
currency being now almost recessionary. The CHF is attractive relative to the
euro because of absence of political risk and because it is a safe haven. With
low volatility strategies currency gains really jack up the returns and currency
losses wipe them out totally – currency risk must be avoided, currency
potential needs to be exploited. We bought some dollars in the last few weeks,
but we’re looking for jumping off points, and we’d rather CHF and euro to
Stg and AUD.
What if we’re wrong? Despite our firm convictions
we’re not going out on a limb here; we are even holding some Asian currencies
(notably yen) to further diversify. We’re really trying to play safe but just
squeeze out a bit more from what we have without running any extra risk.
Specific funds
- PPBs
Core (50-70%)
Optimal Coreharbour - This is the new more flexibly managed
version of PSG Global Dynamic (see below) which is available currently in USD,
Stg and euro. Additional currencies will be added in the near future.
Satellite (30-50%)
Man (CHF & AUD)
Forsyth Diversity Euro
Orbis Japan EUR/Optimal and Leveraged EUR
ML Gold and General
GAIM 2012 Note CHF/Long Short EUR
- Generali:
Core (85-100%)
PSG Global Dynamic is a fund for all seasons – aims for
double digits annualised in all investment conditions because it accesses all
asset classes - unlike other balanced or managed funds that tend to take a
static 70/30 equity/bond position. In good times it will under-perform
aggressive managed funds (e.g. New Star) but will achieve greater consistency
and capital preservations. Underlying funds (PSG Global Growth and PSG Global
Balanced are 1 & 2 respectively in their S&P sector over 5 year and 6
years – both launched just under 7 years ago) and Global Growth is ‘Lipper
Leader’ (i.e. top 20% of all funds for capital preservation and consistent
returns). Currency managed for optimal performance. No rocket science, just
making use of all 5 asset classes impartially – i.e. not infatuated with any
particular asset class and applying top class independent analysis. As a fund of
funds, it uses best quality underlying funds. It is hoped to add sterling and
euro classes.
Satellite (0-15%)
Fidelity Japan/Fidelity Jap Smlr
GAM Diversity Euro
GAM Multi Arbitrage EUR
ML Gold & General
Thames River Warrior EUR
- Friends Provident International (Isle of Man):
Core (50-60%)
Collins Stewart Balanced Stg
Satellite (40-50%)
Thames River Mainstay Stg
ML Gold & General
GAM Japan
Eur Balance Yield
- FPI Guernsey:
Core (0%):
None available
Satellite (100%):
International Bond
With Profit
Open Managed Portfolio
- Zurich:
Core (75%)
HSBC Euro Hedge
Zurich In-house managed funds
Satellite (25%)
HSBC Global Hedge
Zurich In-house managed funds
- Royal Skandia:
Core (50-60%)
Forsyth Wealthbuilder Stg
Satellite (40-50%)
Momentum All Weather Liquidity EUR
ML Gold & General
Fidelity Japan
Invesco GT Bond Stg
- Scottish Provident
International:
Core (75%)
Forsyth Wealthbuilder (sadly only available in US$)
Satellite (25%)
European Bond
Japan Growth.
Hansard:
Core (60-80%)
Honeyguide
Pathfinder
Forsyth Wealthbuilder Balanced
Satellite (20-40%)
Invesco GT Nippon
Enterprise
Investec European High Income Bond
SLI:
Core (100%)
Japan
Multi Index with Bonus
Satellite (0%)
OMI:
Core (100%)
Fixed Interest
Satellite (0%)
The above data and research was compiled from sources believed to be
reliable. However, neither MBMG International Ltd nor its officers can
accept any liability for any errors or omissions in the above article nor
bear any responsibility for any losses achieved as a result of any actions
taken or not taken as a consequence of reading the above article. For more
information please contact Graham Macdonald on [email protected]
Snap Shots: Different shots are all around you!
by Harry Flashman
Do you want to get some very different shots this
weekend? Well, different pictures are within easy reach, and are there for
you to capture. Look at the weird shot with this article, for example.
Taken on the planet Venus, with the space ship in the background. Or in
actual fact taken in a botanical garden with a geodesic dome hothouse in
the background.
I was walking through the botanical garden one weekend
and fell into the cactus area, and that was when I noticed the strangely
shaped hothouse in the background. Moving around it slowly I ended up with
this framing, which with the low viewpoint and a wide angle lens made the
foreground cactus a dominant feature, with the geodesic dome space ship
the secondary item in the shot.
So what has all that got to do with your photography?
Geodesic domes aren’t that common in Thailand. What it really means is
that you have to develop your photographic ‘eye’ and then let your
equipment do the work for you. I do not really care if you don’t know an
f stop from a door stop, set your camera on ‘Auto’ settings, but learn
to look for different subjects.
When you take shots of your girlfriend sitting in a
deck chair at the beach, this is what we would call a ‘record’ shot.
Not a world record, but merely a record of someone deck chaired on the
beach one January weekend.
No, the shots you should be aiming for are ones with
some impact and composition. What about this weekend screwing your wide
angle lens on your camera (or locking the zoom on “wide”) and seeing
what you can produce? Start looking through the viewfinder and walking in
closer to subjects.
The beauty of the SLR style of camera is that you are
actually looking through the lens at the subject. What you see is what you
get (the WYSIWYG principle), but so often people spend more time looking
over the top of the camera instead of closing one eye and totally
visualizing everything in the scene through the viewfinder. Only by
concentrating on what is actually there, will you start to get some
different photographs. Forget what you ‘think’ you are looking at, but
judge the shot only by what is actually in the viewfinder.
Begin by deciding what you want to shoot. You choose
the subject! A temple, a statue, a house, a car, anything! What you have
to do is make the subject the ‘hero’ in the photograph, and the
easiest way to do that is to make the subject fill the frame. And how do
you know when it fills the frame? By looking through the viewfinder and
noting what is dominant in the frame. This sounds so simple it is
laughable, but go and pick up one of your books of photos and see how
often you ‘fill the frame’? You may be amazed to see just how
infrequently.
Now we both know that by getting in close with a wide
angle lens you will get optical distortion. Subjects closest to the lens
will be appearing larger than they really are, and subjects further from
the lens looking smaller than they really are. This is why you do not take
flattering portraits of people with a wide angle lens, because the nose
becomes dominant! But the wide angle approach is the way for dramatic
distortions which can add that element of impact and excitement to any
photographic study. The differences between ‘record’ and ‘award
winner’.
The message this week is to go out and take shots. Decide on the
subject matter to be covered, use the wide angle for drama and look
through the viewfinder to compose the shot. Take one, turn the camera 90
degrees and then taken another. Now walk in even closer till the subject
fills the frame (you can even let it flow over the edges of the frame for
further impact), and take the shot again, plus another 90 degree rotation.
Do that and see how your shooting will improve.
Modern Medicine: Despite what some women will tell you - Man is not a large rat!
by Dr. Iain Corness, Consultant
Have you ever wondered just how a new drug
finds its way on to the pharmacist’s shelves? Just how do the pharmaceutical
companies manage to develop newer drugs such as ACE inhibitor antihypertensives
when there were already plenty of alternatives? Or the apparently stiff
competition in the drugs for males with Erectile Dysfunction. (I am sure you
have all been receiving emails every day offering you newer and stronger lead
for your particular pencil!)
However, when any new medication is formulated, there begins
a very long process before the new “wonder drug” is licensed for use by you
and me. Part of that process is testing the compound on live beings. Note I did
not say “human” beings. Those live beings are usually convenient test
animals, of which Mr. Rat the rodent is a prime example.
We always need to know how poisonous is the new drug. Mr. Rat
is then fed the new compound in ever increasing quantities until the dose high
enough to kill 50 percent of the rat population is reached. The scientists call
this the LD50 (Lethal Dose for 50 percent) for the new compound - but remember
this is for rats. If it takes 10 mg of compound A to kill 50 percent of the
rats, but only 1 mg of compound B, then B is 10 times stronger than A.
Pregnant Mrs. Rats are also fed the new drug and the
offspring are thoroughly examined to see if there are any abnormalities, greater
than the ‘normal’ amount of expected abnormalities. Yes, no animal,
including us, is without a usual percentage of birth abnormalities. Laboratory
rats in particular are well known for being able to develop all sorts of
abnormalities if you even just look at them sideways!
Only after this exhaustive testing is the drug then used in
limited test runs on a very limited human exposure group. And, by and large,
that does not include its testing on productive age females.
All this takes an enormous length of time, so next time you
read of the new wonder drug “breakthrough” do not expect that this will
appear in the pharmacy next week. Unfortunately, many of these new drugs will
end up never being released as further research often turns up problems that
only made themselves apparent after long term usage.
However, even the ones that do get released have to be
approached with caution. Just because rat testing appeared to show that the drug
was “safe”, does not mean that humans will also react the same way. As the
caption this week says, Man is not a large Rat! This is one reason why women in
particular must be very careful with the drugs they take during pregnancy,
particularly in the first three months, that time when the growing foetal
structures are susceptible to toxic chemical damage. In fact, any woman who has
to take regular medication should ask her obstetrician about the relative risks.
However, this does not mean stop taking the tablets as soon as you miss a
period. Letting the maternal problems run unchecked can be an even greater risk
to the baby than the risk from the medication taken by Mum.
Antenatal care is a very specialized branch of medicine and I
do recommend that you should check in with your obstetrician for advice. You may
not be a rat - but you don’t want to be a guinea pig either!
Learn to Live to Learn: The Honorary Consul
with Andrew Watson
In my elusive search for Dr. Virachai
Techavijit, I had lined up a whole series of questions, ranging from, “Do you
think that international education and business are compatible?” to “How
many Ferraris do you really have?” But the good doctor is very much his
own man and in response to my questions I received the following answers to
his questions:
Dr V: “It is not easy to tell a story about yourself, worse
is when you have to mention some of the good deeds that you did. I was in the
Prime Minister’s Office towards the last days in my official capacity as the
advisor to the prime minister of Thailand. I felt immediately that the role of
honorary consul was one I could play with conviction and competence. I expressed
my interest directly to the Estonian Ministry, supported in writing by my boss,
the then Prime Minister General Chavalit Yongjaiyut, and the former Prime
Minister Anand Panyarachun. In November 1998, to my great pride and pleasure,
the government in Tallinn informed me that I was indeed to be Estonia’s
honorary consul in Thailand. Three months later in February 1999, my appointment
was officially accepted by HM King Bhumibol Adulyadej.
When I visited Estonia and the Ministry of Foreign Affairs in
Tallinn for the first time on Good Friday of 1999, I took the opportunity to
also visit the Ministry of Education to discuss possible collaborations between
the Ministry and the Regent’s School.
An important task I have been engaged in ever since is the
Global Connect Programme for talented young Estonian students aged 14 to 16.
This imaginative scheme enabled bright and purposeful students from a potential
member of the European Union, Estonia (and more recently Czech Republic,
Slovakia, and Armenia), to benefit from spending between one and four years at
The Regent’s School on substantial scholarships to receive English curriculum
based education in Thailand similar if not better than that of a top independent
school in England. Regent’s students are from all over the world, notably the
UK (which is still the largest non-Thai group on campus), USA, Australia, Japan,
Korea, and China. The name ‘Global Connect Programme’ speaks clearly for its
primary objective which is effectively working for future Estonian leaders being
well connected to their counterparts from other important parts of the Globe.
Together, one day soon, they will make this world a better place to live for our
future generations. Recent Regent’s graduates, including one Estonian, have
successfully received places from such prestigious universities as Oxford and
Cambridge in England, and MIT, Michigan and Stanford in the USA.”
AW: And what of you, Dr Virachai, how did you begin?
Dr V: “I began in the fast lane. At the age of sixteen, I
was recruited by a Catholic church to be a teacher to a class of 40
eleven-year-old students. When seventeen, I gained the Diploma of Education. And
when nineteen, the school’s new manager, a priest, was appointed but he had no
diploma necessary to become the headmaster. The Church then appointed me the
headmaster of a 1000-strong boys’ day and boarding school. Although hardly
older than its most senior students, I established my authority through a
combination of visible, physical discipline and evident concern for the boys’
welfare. I stood no nonsense then, anymore than I do today – although my
approach to management has of course become more sophisticated.
My restless energy took me to the USA at the age of 22, to
explore other areas of interest. In 1978, I was appointed to a full-time
teaching post at the University of Nebraska – Omaha, becoming assistant
professor in 1979 when I completed my doctorate. In 1980 I was appointed
associate professor at University of Nevada-Las Vegas. The serious illness of my
father brought me home to Thailand during Christmas 1980, and I decided to defer
taking up a prestigious UCLA post for a year so I could spend time with my
father. I spent 12 years in the USA including 6 years of teaching.”
Education has always been close to Dr. Virachai’s heart. In
1995, he and his wife, Thiphavan, established the first international day and
boarding school in Thailand’s Eastern Seaboard region, following that with a
second campus, in Bangkok, four years later. The two campuses of The Regent’s
School, together with the world-class Outdoor Education Centre on Ko Chang,
provide an academically challenging English-based curriculum, an impressive
range of extra-curricular activities and a close-knit pastoral network for
students from over thirty countries. The Regent’s School is proud to be the
first and still the only school in South-East Asia to become a member of the
Round Square (www. roundsquare.org) – a prestigious group of over 50 schools
world-wide, educating students to become responsible world citizens. Round
Square schools base their approach on six key elements, known collectively as
IDEALS: internationalism, democracy, environmental awareness, adventure,
leadership and service.
My thanks to Dr Virachai for sparing his time for this
article.
Next week: IGCSEs and A levels revisited
 Heart to Heart with Hillary
Dear Hillary,
My problem is that my calf muscles are getting too big. No, I don’t spend
hours in a gym pumping iron and I don’t crush grapes, my problem arises
from all the side stepping I need to do travelling from point A to point B
in Pattaya.
A simple walk from my hotel to my favourite watering hole requires me to
step around numerous footpath vendors and beggars, swerve around Indian
tailors thrusting fashion books in my face, dodge Kateoys attempting to pick
my pockets, skip around bar girls trying to drag me into their bars, spring
from the footpath to the roadway to avoid unlawful motor bike riders and to
spring back again from the road to the footpath to avoid dangerous baht bus
drivers, leap over construction obstacles along Beach Road and to take swift
evasive action to avoid the clutches of my many amorous female admirers.
My side stepping skills would make me the world’s best footballer, but I
just want to calmly walk in a straight line without having to bounce around
like a ballet dancer. Do you have any suggestions?
Mighty Mouse.
Dear Mighty Mouse,
How nice to see mail from you again in 2005, Mighty Mouse. However, your
words struck a chord and brought out the poet in me and I penned the
following lines,
“Wee, sleekit, cow’rin, tim’rous beastie,
O, what a panic’s in thy breastie!” (I was tempted to
write further until I realized I was quoting from the great bard Rabbie
Burns with his ‘To A Mouse’.) But it all fits, doesn’t it, Wee Mighty
Mouse? I can imagine your panic, with all those sidesteps. Thank goodness
none of the buses are driven by Indian Katoeys - you would be devastated!
Suggestions? Since all this seems to occur when you are going to your
favorite watering hole, why not ring up for a take home pack? I’m sure one
of the nice young ladies would be willing to bring it over to you (for a fee
which is probably related to the time spent in your company and perhaps any
accompaniments you wanted to go with the order) and all your sidesteps are
over!
Dear Hillary,
Bona 2005 to you. Nit and Ying (the adorable wee ones)
have been scanned for Babysinghas and given the all clear. The wonders of
modern medicine! Have you ever been under a modern medicine man with a
sturdy couch, Hillary?
Mistersingha
Dear Mistersingha,
When you wrote that the scan was all clear I immediately
thought you must have had the procedure done on yourself, and the man
scanned the wrong end. Never mind, Petal, I’m sure you won’t grieve at
not being a father. After all you show no remorse at being found guilty of
prevarication, and since this a big word, it means “to speak or act
evasively or misleadingly”. You do understand that, don’t you my pouting
Petal? As always, I look forward (without expectation) to your promised
goodies. You would do best to send the chocolates now in the cooler weather.
Dear Hillary,
I have just finished reading my email to you, and it
sounds a little farfetched, but the problem is a real one, Miss Hillary, so
please give it your best shot. I have a somewhat delicate problem, so you
will forgive me for asking that you don’t publish my name. I am a single
man, working in the Middle East and I come here regularly for many weeks at
a time. On these trips over here I generally find that there will be a very
suitable young lady who will indicate that she would like to take care of
me, and a suitable (financial) arrangement can be entered into. This is
great for a bachelor like me, but I also want to play the field a bit while
I am over here too. One young lady has really begun to try and tie me down,
and I can see a problem coming up, because she knows I own my own condo
here. How do I get her to understand that this is not a lifetime
relationship, just a few weeks, and when I go back to work I will want her
to leave the condo and take all of the things that she has managed to bring
over in the last two weeks? I have four weeks left, Hillary, so a quick fix
will be appreciated.
Middle East Matthew
Dear Middle East Matthew,
I think you have just found out that you can’t have
your cake and eat it too! The way around this problem is to bring it out
into view and it will cease to be such a worry for you. Since Hillary
doesn’t know how good your Thai is, it may be better for you to have an
interpreter, as it is important the young lady understands the situation.
And understands it right now, not two days before you leave. She has been
taking care of you, so now you must take a little care of her and her
feelings. Now is the time to spell it all out, my Middle East Matthew. And
by the way, Petal, while we are talking about spelling, it’s Ms. Hillary,
thank you!
Psychological Perspectives: Why do we help those in need?
The psychology of altruism
by Michael Catalanello,
Ph.D.
It is tempting at times to develop an
attitude of cynicism concerning human nature. It seems as if individuals
and groups are engaged in a perpetual struggle for political and economic
advantage over others. Attitudes of suspicion and paranoia abound. Nations
arm themselves to the teeth with terrifying weapons, allegedly to defend
against other nations, sometimes aggressing against their neighbors with
dubious justification.
Decisions by public officials often appear tainted by
narrow self interest. Businesses vie with one another, using cut-throat
tactics to gain an edge against competitors. Corporate profitability often
takes precedence over environmental concerns and public welfare. Workers
compete with coworkers for position, power and influence within the
organization. It is sometimes tempting to think that human beings are
exclusively selfish and self serving, bent upon achieving their personal
goals at the expense of others. In such a dark climate it is especially
gratifying to see the light of human compassion and altruism emerge at a
key moment in history.
Such a moment has occurred in the aftermath of the
earthquake and tsunamis that ravaged Thailand and other countries in the
region of the Indian Ocean. This unprecedented event has resulted in an
equally unprecedented outpouring of concern for the unfortunate victims,
followed by generous global financial contributions and humanitarian
assistance to help the survivors recover from this disaster.
News media are to be commended for focusing the
world’s attention on the broad scope as well as personal dimensions of
this event. In the days and weeks that followed, the images of floodwaters
surging across idyllic resorts, terrified victims clinging to trees and
rooftops, innumerable bodies being recovered, and forlorn survivors poking
through the pathetic ruins of their homes and communities were beamed
around the world. These heart-wrenching scenes of disaster and its
aftermath have commanded the sustained attention and sympathy of the world
for several weeks.
Why do people respond with such compassion and
generosity to others in need? In giving do they hope to gain additional
advantages, or are these acts motivated by genuine caring for others?
Questions like these have long interested researchers in social psychology.
The term altruism, as used by social psychologists, refers to
behavior which is directed at helping other people at some personal
sacrifice, without the anticipation of personal gain. Social psychologist
Dan Batson and others have confirmed the existence of this phenomenon, and
have contributed greatly to our understanding of the factors leading to a
person’s selfless decision to help another in need.
The so-called “empathy-altruism hypothesis”
proposes that we behave altruistically when we have empathy for people in
need, that is, when we take on the perspective of the needy, when we put
ourselves in their place. It seems likely that the intense news coverage of
the tragedy, by stirring such feelings among the public, was instrumental
in bringing about the generous outpouring of humanitarian assistance that
followed.
In addition to empathy, several other factors have been
identified which influence altruism. A person is generally more willing to
perform an altruistic act at great cost if he feels a sense of personal commitment
to the person in need. For example, although one might provide small
monetary donations to help strangers, the donation of an organ is more
likely to be reserved for one’s family members, to whom one feels a
strong sense of commitment.
The degree to which a society values altruism, known as social
responsibility norms, can also have an effect. This norm, in turn, can
influence a person’s willingness to perform an altruistic act. Research
suggests that U.S. citizens, while feeling obligated to help family
members, friends, as well as strangers in life-threatening situations,
generally confine their giving to family members if the situation is only
moderately serious. Citizens of India, by contrast, are inclined to extend
their helping behavior to strangers, even when the need is only minor.
While the motivation for altruism is, by definition, a
selfless act, it appears that people who regularly behave altruistically,
nevertheless, gain significant rewards. The more people help others, the
more they subsequently engage in such behavior. Likewise, such people seem
more likely to embrace altruistic attitudes, as well as express a greater
appreciation for life. Thus, it appears that altruism provides a
“win-win” situation for both the giver and the receiver.
Dr. Catalanello is a licensed psychologist in his home
State of Louisiana, USA. He is a member of the Faculty of Liberal Arts at
Asian University, Chonburi. Address questions and comments to him at [email protected]
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